T-Mobile US and Sprint entered into a merger agreement in an all-stock transaction that values Sprint at $59 billion and the combined company at $146 billion.

The merger includes a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share or the equivalent of 9.75 Sprint shares for each T-Mobile US share.

The combined company will be named T-Mobile, and it will have the network capacity to rapidly create a nationwide 5G network. The combined company will have lower costs, greater economies of scale and provide greater competition. The New T-Mobile will employ more people than both companies separately and create thousands of new U.S. jobs, a statement said.

“The new company will have a strong closing balance sheet and a fully funded business plan with a strong foundation of secured investment grade debt at close,” a statement said.

Following closing, the new company will be headquartered in Bellevue, Washington, with a second headquarters in Overland Park, Kansas, Sprint’s current headquarters. John Legere, president and CEO of T-Mobile US, will serve as CEO, and Mike Sievert, chief operating officer (COO) of T-Mobile, will serve as president and COO of the combined company. The remaining members of the new management team will be selected from both companies during the closing period.

“This combination will create a fierce competitor with the network scale to deliver more for consumers and businesses in the form of lower prices, more innovation and a second-to-none network experience — and do it all so much faster than either company could on its own,” said Legere. “As industry lines blur and we enter the 5G era, consumers and businesses need a company with the disruptive culture and capabilities to force positive change on their behalf.”

With Sprint’s expansive 2.5 GHz spectrum, T-Mobile’s nationwide 600 MHz spectrum, and other combined assets, the New T-Mobile plans to create the highest capacity mobile network in U.S. history. Compared with T-Mobile’s current network, the combined company’s network is expected to deliver 15 times faster speeds on average nationwide by 2024, with many customers experiencing up to 100 times faster speeds than early 4G.

Neither company standing alone can create a nationwide 5G network with the breadth and depth required to fuel the next wave of mobile Internet innovation in the U.S. and answer competitive challenges from abroad, executives said.

AT&T and Verizon still own 34 percent and 172 percent more spectrum, respectively, than the combined company. “Even with their vast resources, AT&T and Verizon cannot rapidly build nationwide 5G, and their planned 5G networks will only be available sporadically in just a handful of very limited areas,” a statement said. “To build nationwide 5G, they either have to kick current customers off LTE (Long Term Evolution), which would take years, or use a type of spectrum (millimeter wave) that can only carry a signal 2,000 feet from a cell site — versus multiple miles for other spectrum — making it nearly impossible for either of them to create a truly nationwide 5G network quickly.”

The boards of directors of T-Mobile and Sprint have approved the transaction. Deutsche Telekom and SoftBank Group are expected to hold about 42 percent and 27 percent of diluted economic ownership of the combined company, respectively, with the remaining approximately 31 percent held by the public.

The board will consist of 14 directors, nine nominated by Deutsche Telekom and 4 nominated by SoftBank Group, including Masayoshi Son, chairman and CEO of SoftBank Group, and Marcelo Claure, CEO of Sprint. Legere will also serve as a director. The combined company is expected to trade under the (TMUS) symbol on the NASDAQ.

The transaction is subject to customary closing conditions, including regulatory approvals. The transaction is expected to close no later than the first half of 2019.

“This isn’t a case of going from four to three wireless companies — there are now at least seven or eight big competitors in this converging market,” Legere said. “And in 5G, we’ll go from zero to one. Only the New T-Mobile will have the capacity to deliver real, nationwide 5G. We’re confident that, once regulators see the compelling benefits, they’ll agree this is the right move at the right time for consumers and the country.”

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